For someone so young, Californian Danny Reed has seen more than his share of pain and trouble. Sixteen years ago, while asleep in his tent at Nevada’s Burning Man festival, a drunk driver drove through his tent and left Danny partially disabled and with permanent brain damage. He was 21 years old.

Danny settled his personal injury suit for $815,000 and a special needs trust was created from the net proceeds with his mother as Special Trustee.

Then three years after that disaster, Danny was visited by more bad luck. A car ran him down in a cross-walk.

The cross-walk case also settled. And the net settlement proceeds from $900,000 were also put into a trust for Danny’s lifetime care.

Six figures for 4.5 months.

Four years ago, after a probate court investigator raised issues about the administration of Danny’s trust, the probate court removed his mother as trustee and temporarily appointed the Public Guardian. There was never a finding his mother had done anything but act properly and in good faith. Indeed, funds and assets were subsequently correctly accounted for to the satisfaction of the court and the parties.

But following several hearings and over Danny’s objections, the probate court nonetheless appointed Thomas Thorpe of Dragomir Fiduciary Services, Inc. to succeed the Public Guardian as temporary trustee of Danny’s special needs trust.

Here’s the rub. The trust specified that a successor trustee was not entitled to compensation. In fact, Danny’s mother received no compensation for her work as his trustee.

Thorpe, however, served for four and one-half months and billed the estate $108,771.07 for trustee and trustee attorney fees. When he petitioned the court for his fees, the trial court awarded him $51,285.63 over objections that the trust instrument prohibited compensation.

So Danny appealed the order. A few days ago, in a published opinion, which consequently makes law in California, the appellate court reversed the trial court and directed it to deny Thorpe’s fee petition.

The appellate court relied on the plain meaning of the trust provision that “a successor trustee . . . is not entitled to compensation.” It also relied on earlier precedents, which hold that a trustor has the right to specify a trustee’s compensation. And more importantly, that “it is not within the power of the court to change, alter or modify such provisions or to substitute its predilection for the expressed instruction of the [trustor].”

And besides the court said, under earlier case authority, if the successor trustee “deemed the amount of compensation specified in the trust to be inadequate, he could have refused to act.”

Thorpe may appeal to the California Supreme Court so Danny may not yet be off the hook.

Loss of trust.

Although California has long been considered a leader in enacting laws protecting its most vulnerable citizens, the system isn’t perfect.

On November 13th — just one month before the California Appeals Court did right by Danny Reed — the Arizona Supreme Court took a pass on Marie Long’s appeal of the Arizona Appellate Court’s decision upholding a lower court award of $840,000 in fees to Marie’s lawyers and fiduciaries.

The Arizona Appellate Court found no error or prejudice — even though it did not condone “the highly inappropriate conduct” of the trial judge’s ex-parte contacts with the lawyers seeking approval of their fees.